TMI Blog2018 (10) TMI 1750X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be constituted as a proof of purchase of property for claim of deduction u/s. 54. There is no agreement entered by the assessee with the developer before due date of filing of return. CIT(A) after considering the submission and evidences concluded that on the date of agreement of sale on 17/11/2011, the assessee has paid 85% of total cost of the said flat. The agreement could not be registered by appropriate authority as commencement certificate was not issued to the builder/developer. The developer vide its confirmation dated 07.12.2014 confirmed this receipt of consideration of ₹ 3.26 crores. Right in respect of property have been created in favour of the assessee. In ITO vs. Saroja Naidu [ 2016 (12) TMI 546 - ITAT C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty has to be purchased/constructed within the stipulated period mandated in the Act. 2. On the facts and in the circumstances of the case and in Law, the Ld.CIT(A) has erred in directing to allow deduction u/s.54 by not considering the fact that neither the construction of the said property was completed nor its possession was received by the assessee within the stipulated period mandated in the Act. 3. The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 4. The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary. 2. Brief facts of the case are that in the return of income for assessment year 2011-12, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Term Capital Gain was brought to tax. On appeal before the CIT(A) the action of the A.O was reversed and the assessee was allowed exemption under section 54 of the Act. Hence, aggrieved by the order of the CIT(A) the revenue is in appeal before us. 3. We have considered the submission of the ld. Departmental Representative (DR) for the revenue and the ld. Authorized Representative (AR) for the assessee and perused the material available on record. The ld. DR for the Revenue supported the order of the assessing officer. He further submitted that the assessee had furnished unregistered agreement dated 27/11/2011 for acquisition of flat which was proposed to be constructed. The documents cannot be recorded as proof of purchase of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17/11/2011, and copy of guidelines of registration of sale deed by Govt. of Maharashtra. The Ld. AR for the assessee further submits that on execution of agreement of sale on 17/11/2011 the assessee has paid 85% of total cost of new property/flat. 5. In support of the submission the AR of the assessee relied upon the decision of Hon'ble Karnataka High Court in the case of CIT vs. Mrs. Shakuntala Devi (389 ITR 366), decision of the Tribunal in the case of Bhavna Cuccria vs. ITO (165 ITD 124)(Chd.-Trib.) ACIT vs. M. Raghuraman (169 ITD 315)(Chennai-Trib.) Mrs. Seema Sabharwal vs. ITO (169 ITO 319) (Chd.-Trib.), Gautam Jhunjhunwala vs. ITO (ITA No.1356/Kol/2017 dated 7th Sept. 2018) 6. We have considered the rival s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a condition for allowing exemption. 7. The Hon ble Karnataka High Court in CIT vs. Shakuntala Devi (389 ITR 366) held that utilization of Capital Gainin construction of residential house within a period of two years would suffice to claim exemption u/s. 54 irrespective of fact that neither sale transaction was concluded, nor registration had taken place within two years. The coordinate bench of Chandigarh Tribunal in the case of Bhavna Cuccria vs. ITO (165 ITD 124)(Chd.-Trib.) held that wherein substantial amount of Capital Gainhas been invested by the assessee for purpose of purchasing a new house, deduction u/s. 54 cannot be denied for the reason that construction was not completed within three years or house was not purchased w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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